Bridgewater V Leahy-A Bridge Too Far?

Rickett, Charles E. F., University of Queensland Law Journal

I Introduction

Decisions of superior appellate courts, particularly those from the senior court in a jurisdictional hierarchy, such as the High Court of Australia (which of course sits at the top of a number of judicial hierarchies), can be judged and critiqued on a number of bases. First, was the best decision reached on the facts as established on the evidence brought at trial and as interpreted in the trial court and by any intermediate appellate court? Secondly, do the judgments given present a coherent and reasoned account of the extant legal materials to be considered in reaching a conclusion as to what law is to be applied? Thirdly, was the law as stated applied properly to the facts as established and interpreted to reach the decision actually made? Fourthly, if the statement of law in the decision interprets or advances the law as previously understood--which will usually be the case in an ultimate appellate court--then is that statement a coherent fit with what has gone before in the law? In my view, an important matter in this fourth question is whether the statement can be justified morally. Law is fundamentally coercive--and it seems to me that a legitimate exercise of coercion requires a clear moral justification. I do not by saying this mean that the law must be in pursuit of some social or economic policy in order to be justified. That too many people these days think that that is what is meant by calling for moral justification in law is simply a tragedy in my humble view. I believe justification in law is a matter of justice, and in particular what has become generally known in modern debate as corrective justice. (1) I have been asked to identify and discuss the worst case decided by the High Court of Australia in the past quarter century. I have no idea whether I have achieved this apparently objective standard by choosing Bridgewater v Leahy. (2) I have not read all the cases handed down by the High Court over the past 25 years. Further, I am not versed in a broad enough span of legal knowledge to be able to make that assessment even if I had read all the Court's decisions. But I have long regarded Bridgewater v Leahy, a case I have considered in teaching a range of private law subjects over the years since it was decided--equity, contract law and restitution law--as a troubling case. I think fundamentally it is a case where a serious injustice was done to the defendants, and where the law of unconscionable bargain was stretched almost to breaking point. I feel emboldened in my intuitive view by the fact that the case was heard by a total of nine judges, of whom four held for the defendants and five for the plaintiffs. That there is something very difficult about the case then cannot be doubted. That split in the numbers alone should warn us of that. Indeed, in the High Court itself two judgments were given and the plaintiffs won by a bare majority of one. A reading of the two judgments side by side leaves one feeling very much as if a kind of parallel universe experience is upon us. Whether or not one agrees with my assessment that this is the worst High Court decision of recent times, I hope that by the close of this paper you will agree that it is at least a very worrying decision!

I shall proceed as follows. In Part II I outline the facts and history of the case. In Part III I make observations about the parties to the litigation from a perspective in corrective justice. In Part IV I shall comment on what the High Court's decision does to the law of unconscionable bargain. Almost seventeen years ago, in Attorney-General v Equiticorp Industries Group Ltd (In Statutory Management) (3) McKay J, speaking for himself and the other members of the New Zealand Court of Appeal, Richardson and Henry JJ, memorably stated: (4)

It is not enough for a party to cry 'equity' and expect to be
compensated. One must identify the relevant principle of equity on
which a claim can be properly founded. …

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